City of Chicago Mandates a Living Wage for workers.

[bluesbassman]

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But it will be interesting to see if the implementation of this in a big city like Chicago will actually cause all these stores to leave, as all the minimum wage doomsayers were predicting on this board a few months ago, or whether, as I predicted, most stores will simply stay and raise prices a little.

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But this just hurts everyone that SHOPS at Wal-Mart! The wage increase means that all the poor people shopping at Wal-Mart now have to pay increased prices for their goods, making them all POORER.

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Exactly, although this isn't the fundamental reason why I oppose the minimum wage.

The only way to ultimately improve the standard of living, including and especially among the "poor," is to increase per capita economic production. The minimum wage is, at best, a smoke-and-mirrors approach which only decreases economic efficiency.

If those who support the minimum wage are genuinely concerned about improving the standard of living of low wage workers, they should instead be in favor of reducing/abolishing both individual and corporate taxation. That would have the dual effect of immediately increasing real net wages, as well as boosting economic growth and production.

[hmkpoker]

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If those who support the minimum wage are genuinely concerned about improving the standard of living of low wage workers, they should instead be in favor of reducing/abolishing both individual and corporate taxation.

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[img]/images/graemlins/smile.gif[/img]

[canis582]

Can we stop posting misleading thread titles? [b]And we need a one post per poster in a thread until the thread gets to be a certain size.

[TomCollins]

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Can we stop posting misleading thread titles? And we need a one post per poster in a thread until the thread gets to be a certain size.

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I propose 1 post per thread from canis for every 10,000 posts in a thread.

Edited to fix Canis's inability to use tags.

[pvn]

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But it will be interesting to see if the implementation of this in a big city like Chicago will actually cause all these stores to leave, as all the minimum wage doomsayers were predicting on this board a few months ago, or whether, as I predicted, most stores will simply stay and raise prices a little.

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But this just hurts everyone that SHOPS at Wal-Mart! The wage increase means that all the poor people shopping at Wal-Mart now have to pay increased prices for their goods, making them all POORER.

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And there's a lot more people who shop at Wal-Mart than work there.

[iron81]

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But it will be interesting to see if the implementation of this in a big city like Chicago will actually cause all these stores to leave, as all the minimum wage doomsayers were predicting on this board a few months ago, or whether, as I predicted, most stores will simply stay and raise prices a little.

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But this just hurts everyone that SHOPS at Wal-Mart! The wage increase means that all the poor people shopping at Wal-Mart now have to pay increased prices for their goods, making them all POORER.

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I'm gonna take a whack at this argument. You have to remember that most of the people who shop at Wal-Mart make more than minimum wage. Admittedly, an increase in the minimum wage will increase costs for Wal-Mart and they could increase prices in response. I argue that these price increases will be small because 1. The competitive pressure on Wal-Mart to keep prices down will still be present and 2. The wages of minimum wage workers represent a small portion of Wal-Mart's expenditures: Rent, buying products from vendors and the wages of people making more than minimum wage probably account for at least 85% of Wal-Mart's expenitures. If this 85% figure is true, and you doubled the wages of people making minimum wage, Wal-Mart's costs would increase %15 percent (as an example. I would like to see an across the board increase in the Minimum Wage). Say they passed all of these costs on (they probably wouldn't) so that their prices are now %15 more. That means that minimum wage workers, at Wal-Mart and other stores, just saw their costs go up %15. But fortunately, their salary just doubled, so they end up ahead.

But since there is no free lunch, this subsidy has to be made up for by all the other customers who make more than the minimum wage, who are now poorer because their costs just went up %15. You can see that this is just another form of wealth redistribution. Fortunately for me, I am a Liberal, so I don't see a problem with this. A certain amount of wealth redistribution is a good thing for society, and if it comes in the form of encouraging people to work, so much the better.

[Riddick]

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and you doubled the wages of people making minimum wage, Wal-Mart's costs would increase %15 percent

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once again, this is completely false. Wal-Mart workers ***all*** make more than minimum wage, closer to double it.

If the minimum wage were doubled to say $10, Wal-Mart's expenses would rise very little (cashiers and overnight stockers *start* at $8-10 depending on the region, from which it is moved up with experience).

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But fortunately, their salary just doubled, so they end up ahead.


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It is not so fortunate for all of the workers making minimum wage that now get laid off due to the min. wage doubling.

[Riddick]

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You can see that this is just another form of wealth redistribution. Fortunately for me, I am a Liberal, so I don't see a problem with this.

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Do you see any problem with me robbing a bank and giving half of what I stole to a children's hospital?

[bluesbassman]

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You can see that this is just another form of wealth redistribution. Fortunately for me, I am a Liberal, so I don't see a problem with this. A certain amount of wealth redistribution is a good thing for society, and if it comes in the form of encouraging people to work, so much the better.

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Good point. In fact, rather than incarcerate thieves, we should reward them. After all, they are redistributing wealth from the rich to the poor, and like you say, they are encouraging the people from whom they steal to work harder. Thus, the work they do benefits society as a whole.

[iron81]

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and you doubled the wages of people making minimum wage, Wal-Mart's costs would increase %15 percent

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once again, this is completely false. Wal-Mart workers ***all*** make more than minimum wage, closer to double it.

If the minimum wage were doubled to say $10, Wal-Mart's expenses would rise very little (cashiers and overnight stockers *start* at $8-10 depending on the region, from which it is moved up with experience).

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My analogy was sligtly imprecise. In my example, I slapped a Wal-Mart label on a generic business that pays some of its workers minimum wage and some more.

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But fortunately, their salary just doubled, so they end up ahead.


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It is not so fortunate for all of the workers making minimum wage that now get laid off due to the min. wage doubling.

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In the example I gave, Walmart was able to recoup their costs by increasing prices instead of laying people off. But lets talk about layoffs due to a minimum wage hike. The wages paid a worker are not set by that worker's value to the company, but rather, what it would cost the employer to find a replacement worker. If the value of that job to the employer is less than it would cost to find someone to fill it, that job will be eliminated. Lets say a minimum wage worker is working a job that the employer would be willing to pay $9/hour for if he had to. He doesn't have to because it is a low skill job, so he pays $5.15. If you increased the minimum wage to $7/hour, this worker gets to keep his job. I suspect that most of the jobs that minimum wage workers have have utility to their employer of much more than $7/hour. Therefore, most minimum wage workers would get to keep their jobs. Admittedly, some would lose their jobs, but our economy is in good enough standing that these workers can find new $7/hour jobs, thereby creating a net gain on the lives of minimum wage workers.